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INDUSTRY NEWS


16 June 2008

Poor Software 'Can Hamper M&A Activity'


Mergers and acquisitions (M&A) are running into failure because companies are unable to integrate sub-standard enterprise application software systems, it has been revealed.

According to a survey from software company Unit 4 Agresso, as many as 90 per cent of European M&As fall short of their initial objectives, with IT as much of a reason for failure as clashing cultures, mismanagement and flawed strategies.

Tony Dobbe, vice president of product marketing at the company, said that poor quality IT systems should never be the reason for a failed merger or acquisition, because it take very little to invest in application development and systems integration.

"The expected benefits of a merger - shareholder value and economic scale, mostly - are often lost due to inadequate post-merger adaptation of enterprise applications," he warned.

According to a recent report by Gartner, the market for application architecture and middleware software grew to £7.2 billion in 2007, up by 12.9 per cent from 2006, with growth being driven by new market segments such as Business Process Management Suites (BPMS).

© 2006 Adfero Ltd.

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